Overview: The Maryland Two-Income Subtraction is a tax benefit available to married couples who file a joint tax return and both have income subject to Maryland tax. This subtraction allows eligible couples to reduce their taxable income by up to $1,200.
Eligibility: To qualify for the Maryland Two-Income Subtraction, you must meet the following criteria:
- Married Filing Jointly: You and your spouse must file a joint Maryland tax return.
- Both Spouses Have Income: Both you and your spouse must have income that is subject to Maryland tax.
Calculation: The subtraction amount is determined using the Two-Income Married Couple Subtraction Worksheet. Here’s a simplified version of the steps involved:
- Determine Each Spouse's Income: Enter the portion of federal adjusted gross income attributable to each spouse.
- Add Additions to Income: Include any additions to income for each spouse.
- Subtract Subtractions from Income: Deduct any subtractions from income for each spouse.
- Compare Amounts: Compare the adjusted amounts for each spouse and enter the smaller amount.
- Apply the Subtraction: The maximum subtraction is $1,200 or the smaller amount from the comparison, whichever is less.
Example: If Spouse A has an adjusted income of $30,000 and Spouse B has an adjusted income of $25,000, you would compare these amounts and use the smaller amount ($25,000). Since $25,000 is greater than $1,200, you can subtract the full $1,200 from your taxable income.
Pathway to the Maryland Two-Income Subtraction: To locate the Maryland Two-Income Subtraction within TaxSlayer.com, follow these steps:
- Log in to your TaxSlayer account and navigate to State on the left-hand side
- Edit your Maryland Return using the 3 dots and proceed to the "Subtractions from Income" section.
- Locate the "Two-Income Subtraction" option and click on it.
- Enter the required information for each spouse as prompted by the software.
- Complete the Two-Income Married Couple Subtraction Worksheet as guided by TaxSlayer.
- Review and confirm the subtraction amount applied to your Maryland tax return.
Important Notes:
- The subtraction is limited to $1,200 per couple, not per spouse.
- Ensure all calculations are accurate and complete the worksheet as required.